Northern Rock Hard Sell

pitbull · 9 July 2005 at 5:47PM

Hi all,

Just a warning for you all, this was my experience of Northern Rock.

I applied for a £3000 loan online from Northern Roack last night and chose not to take the insurance option. On clicking the submit button the website first asked if I was sure I didn't want the insurance and had a dropdown box with the insurance options listed, this meant I had to select no again

after I clicked the submit button again, the site said the decision was deferred and gave me a number to ring. :mad:

I rang the number and got a sales chap who went through some of the questions I had already answered and then put me on hold whilst he got a decision. On his return he said I had been accepted but proceeded to try and sell the insurance. This I can cope with because I can still say no, it was the manner in which it was done that upset me, the following is the tactics used:

Lenghty explanation of the benefits and then tried to sell me the insurance, I said no so he started to ask me how much money I had in savings and proceeded to tell me that I could not repay the loan if I became ill or unemployed. I asked if the insurance was being made a condition of the offer, he said no, I then refused the insurance again. He then asked me what assurance I could give that I could cover the loan if anything happened, I told him that was my problem and none of his business, he then told me it was a new thing set by the FSA saying that we are now legally obliged to tell them that sort of information. At this point I told him to forget it and I would take my business elsewhere, it was only when I did this that he processed the loan annd accepted it on my terms. :T

I think this should serve as a warning to others considering NR and hopefully I had the rogue dealer. I hope that this isn't normal practice for NR.

John_Jackson_2 · 15 July 2005 at 8:47PM

pitbull wrote:

.....Lenghty explanation of the benefits and then tried to sell me the insurance, I said no so he started to ask me how much money I had in savings and proceeded to tell me that I could not repay the loan if I became ill or unemployed. I asked if the insurance was being made a condition of the offer, he said no, I then refused the insurance again. He then asked me what assurance I could give that I could cover the loan if anything happened.....

In other words, he wanted you to take out insurance so that they are protected in case you lose your job.

Well done for sticking to your guns.

I think this should serve as a warning to others considering NR and hopefully I had the rogue dealer. I hope that this isn't normal practice for NR.

I think it is becoming a standard practise in many organisations. Selling insurance is often more lucrative than selling goods/products: hence the hard sell approach. :mad:

StueyB_2 · 15 July 2005 at 9:49PM

John_Jackson wrote:

In other words, he wanted you to take out insurance so that they are protected in case you lose your job.

Well done for sticking to your guns.

I think it is becoming a standard practise in many organisations. Selling insurance is often more lucrative than selling goods/products: hence the hard sell approach. :mad:

I had the same thing and told the thick monkey on the end, either give me the mortgage and shut up or im off to a decent provider

. He was kinda lost for words after that

ReportInvestor · 15 July 2005 at 11:51PM

Well said, Pitbull.

But it's not just Northern Rock :mad:

80% of premiums for PPI (Payment Protection Insurance) are taken by the banks as commission. This is possibly the biggest rip-off (£ for £) in the business.

realaledrinker · 16 July 2005 at 12:26AM

I work for a bank and one of the main Key Performance Indicators is the percentage of loans sold with Repayment Protection Insurance.

It averages out at about 60%

The whole concept stinks.

pitbull · 17 July 2005 at 11:16AM

realaledrinker wrote:

I work for a bank and one of the main Key Performance Indicators is the percentage of loans sold with Repayment Protection Insurance.

It averages out at about 60%

The whole concept stinks.

I agree with that, I for one hate buying from high street stores because I know they are going to try and sell me the insurance, I nearly allways buy via mail order off the internet. This often works out cheaper.

MarkyMarkD · 17 July 2005 at 4:44PM

John_Jackson wrote:

In other words, he wanted you to take out insurance so that they are protected in case you lose your job.

Well, no.

You are liable to repay the debt, irrespective of losing your job, getting ill, or whatever.

The insurance protects you in meeting that liability, and the adverse impact on your credit history etc. which would occur if you did default on a loan (the impact of which could be quite significant in your ability to borrow in future).

It only (as a secondary thing) protects the lender if you default because you are unable to meet your liability - and then, to a limited extent because the profit sharing agreements in place between the insurers and the lenders mean that the lenders actually bear some, or all, of the risk of default in any case.

The NR member of staff is quite right that the FSA is insisting that lenders ascertain the ability of customers to pay, and reminding them of the availability of payment protection insurance is just part of that.

In these circumstances, just tell them you are buying the cover elsewhere because it's cheaper. Then they won't need to worry about your security.

pitbull · 18 July 2005 at 7:33AM

MarkyMarkD wrote:

The NR member of staff is quite right that the FSA is insisting that lenders ascertain the ability of customers to pay, and reminding them of the availability of payment protection insurance is just part of that.

In these circumstances, just tell them you are buying the cover elsewhere because it's cheaper. Then they won't need to worry about your security.

Is this information available on the FSA web site? If it is could you post the URL, I would be interested to read it because this is the first time I have been asked such information before a decision to grant a loan is made.

The questions asked were rather personal and I had to tell the person to mnind his own business on a number of occasions, the issue is and will allways be my problem, I was even asked about my Mortgage indemnity, what has that got to do with him?

I have decided not to take NR up on their offer as I am annoyed by their attitude and I am now considering whether to formally complain about this incident.

Rafter · 19 July 2005 at 11:28AM

You can't have it both ways though.

If the bank is charging 5.7% for a loan and base rates are 4.75% that is less than 1% margin.

Now given that say 4% of people never repay their loan that 1% is not enough to cover the banks losses for bad debts.

They therefore have to sell insurance to make any profit at all.

Now if Northern Rock had to charge an interest rate that at least covered their expected losses, the interest rate would probably have to be about 8-9% but then payment protection could be sold for a more realistic price, and the poor sales agents wouldn't be forced to use heavy handed tactics?

Would you be happy to have loan rates rise to 8% or would you prefer that the 'mugs' who take out Payment Protection insurance continue to subsidise very low loan rates?

R.

John_Jackson_2 · 20 July 2005 at 12:48AM

MarkyMarkD wrote:

Well, no.

You are liable to repay the debt, irrespective of losing your job, getting ill, or whatever.

The insurance protects you in meeting that liability, and the adverse impact on your credit history etc. which would occur if you did default on a loan (the impact of which could be quite significant in your ability to borrow in future).

I agree, but look at the original posting:

"He then asked me what assurance I could give that I could cover the loan if anything happened"

Whose interests were being considered?

Let's not lose sight of the fact that lenders have a vested interest in their customers taking out insurance. That is for their own interests; not the customer's.

pitbull · 20 July 2005 at 7:50AM

Thanks for the reminder John, as stated, my original post was about the heavy tactics used by the agent. I spent 15 minutes trying to convince this guy that I wasn't going to take the insurance, I was even late for an appointment by the time I got him off the phone.

Rafter, no one wants high interest rates but if the whole business wasn't so seedy it would be much better to deal with these people. Look at the original post, I was highlighting for others my experience of the hard sell and the type of questions asked which I feel were personal and unwarranted.

Northern Rock Hard Sell

Comments

Confirm your email address to Create Threads and Reply

🚀 Getting Started

Categories

Is this how you want to be seen?

Get our FREE Weekly email full of deals & guides - and it’s spam-free